• Workers’ Compensation: Rulings have implications for wages, care
     | January 20,2014

    @Body Ragged Right:Over the past year, there were a number of legal rulings that affected employers and employees in the workers’ compensation system. The start of the new year seems an appropriate time to glance back at the past while gazing forward.

    @Body Ragged Right:Employers should be aware of how these decisions may affect good practice, premiums and potential legislation.

    In Lydy v. Trustaff Inc./Wausau Insurance Co., the Vermont Supreme Court ruled 3-2 that employer-paid health insurance premiums are not wages as defined by the Vermont Workers’ Compensation Act.

    The injured worker argued that the employer’s contributions to health insurance premiums should be included in the calculation of the worker’s average weekly wage earned before suffering an on-the-job injury. The average weekly wage is used as the basis for wage replacement and other benefits received by an injured employee in the workers’ compensation system.

    The court disagreed with employee’s interpretation. In part the decision indicates that because an employer’s contributions to health insurance do not reflect the employee’s labors or compensation as defined through wages, the amounts paid by the employer for health insurance premiums are not included in the calculation of average weekly wage.

    That case remains the current law. The future, however, is unclear. There is one pending piece of legislation trying to change the ruling by specifically making the value of employer-paid health premiums part of the computation of wages. It is unclear what will become of that legislation and how it could increase premiums paid by employers or would be affected by the current Affordable Care Act mandates and the various funding mechanisms to be proposed for Green Mountain Care in 2017. This emphasizes that Vermont businesses need to stay aware of pending legislation and the effect statutory changes may have on their business costs.

    In the past year the commissioner of the Vermont Labor Department posted 22 decisions on its website. While certain individual issues may be of interest to employers, many rulings continue to be decided on the basis of which medical provider is to be believed: the doctor who testifies for the employee or the one who testifies for the employer.

    These decisions serve as a reminder to employers that the Department of Labor relies heavily on the clarity, thoroughness and objective support underlying the doctor’s opinion. The decisions regularly cite a five-part test for assessing physician credibility that includes: 1. the nature of the treatment and the length of time there has been a patient-provider relationship; 2. whether the expert examined all the pertinent medical records; 3. the clarity, thoroughness and objective support underlying the opinion; 4. the comprehensiveness of the evaluation; and 5. the expert’s qualifications.

    With the emphasis on those factors in many of the litigated cases, the opportunity that the Vermont employer is afforded to choose the first medical provider to treat an injured worker takes on added importance.

    Under Vermont’s laws, the employer is entitled to direct the care of the injured worker. A physician who is familiar with the workplace, work stations and physical make-up of the plant gives the provider vital information for opinions on whether the mechanism of injury is consistent with the provider’s understanding of the job; whether the worker is capable of going back to his or her old job without missing any time from work; and any time-limited light duty that may be available on site.

    This provider may have knowledge that provides an advantage before the department with the ability to provide a clear, thorough and objective opinion when testifying.

    In the new year employers who follow current trends in workers’ compensation will have better opportunities to improve their experience and knowledge in this ever-changing area of business.

    John W. Valente is an attorney with Ryan Smith & Carbine Ltd. in Rutland. He is the author of “Understanding Workers’ Compensation: Managing Workplace Injuries and Lowering Costs.” These materials are for general information only and are not intended as legal advice. Readers should not act upon this information without seeking professional counsel tailored to their specific facts and circumstances.

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